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RESOLUTION NO. 5014 <br />A RESOLUTION DESIGNATING THE CITY OF EUGENE AS AN <br />ARRA RECOVERY ZONE, AUTHORIZING PRELIMINARY <br />ACTIONS IN CONNECTION WITH CONDUIT BONDS FOR <br />BENNETT MANAGEMENT COMPANY, AND AUTHORIZING <br />SUBALLOCATION OR TRANSFER OF RECOVERY ZONE <br />ECONOMIC DEVELOPMENT BOND AUTHORITY FOR LANE <br />COMMUNITY COLLEGE, <br />The City Council of the City of Eugene, Oregon, finds as follows: <br />A. The American Recovery and Reinvestment Act of 2009 ("ARRA") permits the issuance <br />of recovery zone bonds. The City of Eugene has been allocated $11,083,000 of Recovery Zone <br />Facility Bonds ("RZFB") and $7,389,000 of Recovery Zone Economic Development Bonds <br />('6'61?,,.ZEDBs") volume cap. <br />B. RZFBs are tax- exempt bonds that can be issued before January 1, 2011, to finance <br />depreciable property that is .privately owned or used, is located in a recovery zone, and is. constructed, <br />reconstructed, substantially renovated or acquired by purchase by a private user after the recovery zone <br />is designated. This type 'of property ordinarily i's not eligible for financing with low cost, tax - exempt <br />bonds. <br />C. Bennett Management, Company ("BMC") .has proposed development of a . roughly $10 <br />million retail and commercial :building that will be located on a vacant parcel directly south of the <br />Centre Court Building (the "Bennett Project "). <br />D. BMC has requested assistance from the City of Eugene to make the Bennett Project <br />financially viable, including (i) the transfer of ownership of the property from Beam Development to <br />BMC; (ii) utilization of the City's RZFB authority to allow BMC to achieve a lower, tax- exempt <br />interest rate on its bank loan; (iii) a City commitment to occupy and/or guarantee up to 20,000 feet of <br />office space in the new facility; and (iv) a potential Downtown Redevelopment Loan Program loan to <br />assist with closing financial gaps. <br />E. The City's ' Debt Policies, which are attached hereto, set out requirements for conduit <br />financings like - the proposed RZFB financing for the Bennett Project. The Bennett Project financing <br />will comply with the debt policies related to conduit financings except for the rating - or -credit <br />enhancement requirement. Because the Bennett Project will be financed through a bank private <br />placement loan rather than a public bond sale, this policy requirement is not needed. <br />F. The RZFBs for the Bennett Project will be payable solely from revenues provided by <br />BMC, related parties and users of the Bennett Project. <br />G. RZEDBs are taxable bonds that can be issued before January 1, 2011, for public <br />infrastructure and facilities, and that will receive a subsidy from the federal government for a portion <br />of the interest cast. <br />